Europe TiO2 spot pressured down on lengthy supply, reduced activity

Author: Heidi Finch


LONDON (ICIS)--European titanium dioxide (TiO2) spot prices are under  downward pressure this week amid lengthy supply and reduced activity.

Some western suppliers are keen to shift volumes, with prices being offered below €2,600/tonne FD (free delivered) for standard grade product.

However, other spot indications of €2,600-2,700/tonne FD were also quoted in the market for standard grade product of western origin.

Supply is more than ample for standard grade TiO2 from western and Chinese sources.

While Chinese imports are still competitively priced, the weakness of the euro against the US dollar is a consideration and, as a result, a few traders said they are buying more from western sources for the time being.

Demand is muted, particularly from the main downstream paints sector, due to low seasonal factors, the  slight economic slowdown and customer de-stocking.

The latter of which is linked to working capital considerations, as year-end approaches and amid the declining price sentiment.

The destocking activity has been triggered by the change in price and market sentiment, compared to the sharp price uptrend from started in the second quarter of 2016, until this year's second quarter.

"If you look at last year, volumes were up by 8%, which is above GDP. There was stocking of inventories in the channel when prices were going up," said Chemours' CEO Mark Vergnano in an interview with ICIS.

Vergnano said that the company's so-called Value Stabilisation Contracts this year had meant the producer had not had the need to pre-buy.

European fourth-quarter TiO2 contract prices dropped sharply to €2.65-2.94/kilogram (kg) FD NWE (northwest Europe), down by €0.10-0.15/kg from the previous quarter, on the back of plentiful supply, muted demand and Chinese import competition.

Triple-digit price drops have been frequently quoted by sources in the fourth quarter, particularly in the downstream paints and coatings sector.

In view of falling spot prices, one trader said in some instances quarterly contracts were being re-negotiated, although this did not reflect a general market trend.

Focus article by Heidi Finch

Additional reporting by Joseph Chang